Reduce the costs of decarbonization
The UK was the first among a growing number of major economies to commit to achieving the goal of net zero emissions by 2050. For starters, the country plans to reduce its emissions in 2035 by 78% compared to at 1990 levels. And there are ways to achieve those goals without breaking the bank using different technologies and policies, according to financial, actuarial and business consultant Lane Clark & ââPeacock (LCP).
UK energy company SSE, which was one of the UK government’s main partners at the 2021 United Nations Climate Change Conference, commissioned LCP to analyze low-cost options for delivering a compliant power system. net zero consumption. The analysis revealed that most of the money that will go towards achieving net zero value will be capital expenditures due to the high upfront costs of the required infrastructure. LCP said keeping the cost of capital low and deploying the right capital at the right times and in the right places will be key to achieving affordable net zero.
The company also said that further reform of the electricity market is needed, with a comprehensive market for low-carbon energy that is not limited to new construction, and that investments are needed to accelerate the development, which includes support for the strategic deployment of long-term storage space.
LCP’s analysis also concluded that a system with a high renewable energy content saves money compared to a system with high levels of nuclear construction and can achieve a faster decarbonization rate, due to faster construction time for renewable energies compared to nuclear energy.
In his report, LCP outlined five steps it said could save the UK nearly Â£ 50 billion ($ 68.6 billion) by 2050 and more than Â£ 75 billion by 2060.
- An energy system based on renewables and focused on offshore wind provides significant cost savings and would replace 8 gigawatts (GW) of nuclear capacity. Due to the faster construction time of offshore wind, it also allows for a faster rate of decarbonization until 2035 when further steps are taken to maximize the potential of renewables.
- Low-carbon thermal generation such as carbon dioxide capture and storage (CCS) and hydrogen power generation complement renewables and provide additional cost benefits, while providing additional benefits. other benefits such as support for CCS and hydrogen infrastructure in industrial clusters.
- Longer-term storage and the production of green hydrogen are essential to balance a renewable energy-based system, and the early strategic development of storage options maximizes these benefits.
- Valuing all low-carbon productions equally through the reform of the electricity market could save the system Â£ 20bn by supporting more economical lifespan extensions, retrofits or replenishment on new assets.
- A coordinated offshore transmission grid can significantly reduce the grid costs associated with a high renewable energy system.
“To take this path towards a cleaner, greener future, policy and regulation will need to send a clear signal on the UK’s decarbonization trajectory,” said Tom Porter, LCP partner and chief strategy officer, in a statement. “This will attract the investments needed to build the net zero infrastructure needed to ensure the UK fully resolves the climate crisis.”
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Tags: Carbon budget, COP26, Emissions, Lane Clark & ââPeacock, LCP, net zero, Climate Change Committee, United Kingdom